ISMA 2026: Indian sugar sector bets on SAF and hydrogen for energy shift

India's sugar industry is positioning itself as a future supplier of sustainable aviation fuel and green hydrogen, with senior government and industry officials at a major New Delhi conference calling on mills to accelerate their transformation into diversified bio-refineries capable of supporting the country's clean energy transition.

Speaking at the inaugural session of the Indian Sugar & Bio-Energy Conference 2026, organized by the Indian Sugar & Bio-energy Manufacturers Association in New Delhi, Santosh Kumar Sarangi, Secretary at the Ministry of New and Renewable Energy, said the sector had already completed a fundamental shift in its identity and was ready for a further leap into next-generation fuels.

"Today, you have completed a journey where, from merely being sugar producers, you have become bio-refiners," Sarangi said, pointing to the industry's growing contributions through ethanol production, distilleries and bagasse-based power generation.

He said investments in green hydrogen under India's National Green Hydrogen Mission, alongside green methanol, SAF and other biofuels, could open significant new revenue streams for sugar companies while reducing India's dependence on imported fossil fuels.

The sector's existing agricultural and processing infrastructure, including sugarcane cultivation networks, distilleries, and residue streams such as bagasse and press mud, gives it a natural feedstock advantage for scaling up these new fuel categories, he said.

The two-day conference, held under the theme "Powering India's Energy Security," brought together policymakers, scientists, industry leaders and international delegates to discuss the future of sugar, bioenergy and emerging clean-fuel opportunities.

SAF and hydrogen pathways

The push into SAF and green hydrogen comes as India moves to formalise its aviation decarbonisation framework.

The government amended the Aviation Turbine Fuel (Regulation of Marketing) Order in April 2026 to permit SAF-blended fuel, setting indicative blending targets of 1% in 2027, 2% in 2028 and 5% in 2030 for international flights. Sugar industry feedstocks, including ethanol and agricultural residues, are potential inputs for alcohol-to-jet SAF production pathways, positioning mills as upstream suppliers in an emerging domestic SAF supply chain.

Sarangi said the recent geopolitical environment had reinforced the strategic importance of energy security for import-dependent economies such as India, and that greater domestic production of renewable fuels could materially reduce the country's fossil fuel import bill.

ISMA President Niraj Shirgaokar said sugarcane should increasingly be viewed as a strategic energy crop rather than a commodity input, with ethanol blending already helping mills diversify operations while cutting fossil fuel imports and emissions.

He called for faster adoption of high-ethanol blends, flex-fuel technology and compressed biogas in collaboration with automobile manufacturers and oil marketing companies.

Shirgaokar also stressed the need to strengthen the agricultural foundation of the sector through precision farming, satellite-based crop monitoring and artificial intelligence to improve yield forecasting and supply chain reliability, prerequisites for the stable, large-scale feedstock flows that SAF and green hydrogen production would require.

On the technology side, Sarangi highlighted work underway at the National Institute of Bioenergy in Kapurthala, which is collaborating with ISMA on technologies to convert bagasse into biogas.

He also pointed to the GOBARdhan scheme, which provides capital assistance, offtake arrangements and pricing support for compressed biogas projects, as a near-term opportunity for sugar mills to monetize residue streams while building expertise in clean fuel production.

Platts, part of S&P Global Energy, assessed Sustainable Aviation Fuel HEFA-SPK FOB Straits, reflecting CORSIA-certified cargoes, at $2,540/metric ton Sept. 9, unchanged from Sept. 8.